The Bandaranaike International Airport (BIA) is currently undergoing a major renovation under an accelerated development plan comprising four to five separate sub-projects aimed at expanding the capacity of the existing Terminal 1.
Due to the sharp increase in market prices and construction material costs since the original agreement was signed, the initial loan provided by the Japan International Cooperation Agency (JICA) has become insufficient. As a result, the government is actively engaged in discussions with JICA and the Japanese Government to secure an additional US$450 million to US$564 million in gap financing to meet inflation-adjusted project costs.
The Terminal 1 upgrade project seeks to increase the terminal’s annual passenger handling capacity from six million to ten million passengers. According to authorities, the Rs. 15 billion structural overhaul is being financed entirely through local state resources in order to avoid delays associated with foreign funding.
To accommodate growing passenger volumes during the renovation period, the airport has established 14 additional check-in counters within a temporary marquee facility with assistance from the private sector. These facilities are expected to support the handling of an additional 10 to 20 aircraft per day.
Deputy Minister of Ports and Civil Aviation Janitha Ruwan Kodithuwakku stated that the expansion of Terminal 1 is intended to ease congestion at the airport while the Terminal 2 project remains stalled.
The project includes the expansion of the main departure area to better manage peak-hour passenger congestion. Additional permanent check-in counters will also be constructed and installed to reduce waiting times.
Furthermore, the arrival hall will undergo a complete redesign to accommodate increased passenger traffic and improve the flow of arriving travelers. Plans also include replacing and expanding the existing baggage carousel system with a higher-capacity automated solution to prevent luggage congestion, while increasing the space allocated for duty-free shopping facilities.
Authorities have confirmed that the architectural designs have been finalized and all required regulatory approvals have been obtained. One of the key sub-projects has already been officially awarded, while the remaining contracts are currently in the final stages of allocation through local government procedures.
Meanwhile, the construction and expansion of BIA Terminal 2—often confused with the Terminal 1 upgrade programme—is currently undergoing a critical re-tendering and evaluation process.
According to the Deputy Minister, ground mobilisation and the resumption of physical construction activities are expected to commence between June and July 2026.
The Terminal 2 project had stalled at only six per cent completion in December 2022 after JICA suspended its concessionary loan facility following Sri Lanka’s sovereign debt default.
However, JICA has since agreed to resume funding following the completion of Sri Lanka’s debt restructuring process, providing renewed momentum to the project.
The Ministry of Ports and Civil Aviation has completed its technical evaluation of prospective Japanese contractors bidding for the new Package A1 contract, which covers the completion of the main terminal building, Piers 2 and 3, and the elevated roadway system. The evaluation report has already been submitted to JICA for final concurrence.
The Government is now awaiting JICA’s final approval in order to proceed with the opening of financial price bids.
Construction mobilisation is expected to be officially launched between June and July 2026.
Once the contract is awarded to the successful bidder, the construction period will be legally fixed at 30 months. Accordingly, Terminal 2 is expected to become operational by late 2028 or early 2029.
